Distributed Ledger Technology is the talk of the industry with many private investors pouring funds into it. So, what exactly is this technology all about! Imagine working with a spreadsheet and then sharing it with a third person. A user would have to wait till the other person make changes in it and revert. In this scenario, only two entities are involved. Now imagine, if there were many, let’s say hundreds of entities involved, with which the spreadsheet is to be shared! Even Google spreadsheet does not allow multiple users to edit the same document simultaneously.
Now consider another situation. The financial transaction and other confidential data of many users is stored in a central location. What would happen if a hacker gets to know about this location and hack the system? What would happen to other systems that are dependent on this information? In today’s scenario of ever increasing fraudulent activities, it is difficult to trust a third party for authenticating and verifying transactions honestly.
All these situations have been addressed by distributed ledger technology:
- In a distributed ledger, every computer in the network has a copy of database which keeps updating itself as new transactions happens
- There is no centralize location, where data is stored, so there is no single point of failure
- The liability of verifying and authenticating a transaction lies with the whole network and not a single third party
Combining these features with security features of a Blockchain, which records and form a block of data for all new transactions and then stack these block in a manner that is unalterable, a Blockchain Ledger provides superior security and authenticity.
Distributed ledger technology, if not revolutionary, but is certainly is the next step in the evolution of technology. It is here to stay. A Blockchain ledger keeps track of who owns a specific asset, for example, land, diamonds, etc. Whenever a transaction happens, it is immediately visible to the whole network, which gives it superior security benefits. Hacking a Blockchain ledger is almost impossible because to hack one block in the chain, a hacker needs to hack every other block in the chain’s chronology.